UOB (UOVEF) AI Stock Analysis

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Positive Factors

ASEAN Expansion

UOB's acquisition of Citigroup's consumer businesses in Indonesia, Malaysia, Thailand, and Vietnam allows it to accelerate and deepen its ASEAN franchise, with management expressing confidence in higher structural return on equity of over 13%.

Dividend Yield

There is potential for a higher dividend yield if the dividend payout ratio is raised above 50%.

Fee Income

Fee income surged by 20% driven by record loan fees and a recovery in wealth management and credit card fees.

Negative Factors

Earnings Risks

Higher-than-expected non-performing loans, high inflationary pressure, and recessionary risks could unwind expectations of credit cost and NPL declines, posing risks to earnings.

Federal Reserve Policies

Faster-than-expected Fed cuts pose downside risks to earnings estimates.

Trade Tensions

Ongoing trade tensions between the US and its trading partners contribute to uncertainty concerning UOB's growth targets.

UOB (UOVEF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$45.67B

Dividend Yield4.79%

Average Volume (3M)55.00

Price to Earnings (P/E)10.6

Beta (1Y)0.63

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees32,071

SectorFinancial

Sector Strength82

IndustryBanks - Regional

Share Statistics

EPS (TTM)0.70

Shares Outstanding1,681,656,300

10 Day Avg. Volume149

30 Day Avg. Volume55

Financial Highlights & Ratios

PEG Ratio-34.99

Price to Book (P/B)1.17

Price to Sales (P/S)0.00

P/FCF Ratio-17.51

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$28.31

Price Target Upside0.71% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

UOB Business Overview & Revenue Model

Company DescriptionUnited Overseas Bank Limited, together with its subsidiaries, provides banking products and services. It operates through three segments: Group Retail, Group Wholesale Banking, and Global Markets. The company offers loan products, including overdraft, cash credit, short term, and long-term loans. It also provides buyers credit, structured trade finance, SGD bonds, loan syndication, and M&A services. In addition, the company offers forex, documentary collection, credit, bank guarantee, export and import finance services. Further, the company provides inward and outward remittances, FX spot and forward, current account, and time deposit services. Additionally, the company offers letter of credit advising and negotiation/discounting services; and import and export services comprising of inward and outward bill collection services, and documents against acceptance and payment. Furthermore, the company provides private, commercial, corporate, and investment banking services. It also offers corporate finance, treasury, future broking, asset management, venture capital management, insurance, and stockbroking services; engages in capital market, credit card, and private residential home loan businesses; and loans to small and medium enterprises. The company operates approximately 500 branches and offices in Singapore, Malaysia, Indonesia, Thailand, China, and internationally. United Overseas Bank Limited was incorporated in 1935 and is headquartered in Singapore.

How the Company Makes Money

UOB Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q3-2024)

% Change Since: 3.77%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong overall performance by UOB, highlighted by record-high net profits, robust loan and fee growth, and successful integration of Citi's acquisition. Despite facing specific operational challenges in Thailand and increased credit costs, the bank's resilient asset quality and strong capital position suggest a positive outlook.

Q3-2024 Updates

Positive Updates

Record-High Net Profit

UOB achieved a record-high net profit of SGD 1.6 billion, up 16% year-on-year, driven by broad-based growth across all business segments and key markets in ASEAN.

Strong Loan and Fee Growth

The bank saw a 2% growth in loans (SGD 5 billion from last quarter) and set a new high in fee income at SGD 630 million, supported by trade and wealth demand.

Resilient Asset Quality

NPL ratio remained stable at 1.5% with strong provisioning and a CET1 ratio of 15.5%, reflecting a robust capital and funding position.

Successful Integration of Citi Acquisition

Synergies from the Citi acquisition have started to show positive results, particularly in CASA penetration across 4 markets.

High Customer Treasury Income

Customer treasury income rose to an all-time high of SGD 270 million due to increased hedging demands and higher business flows.

Negative Updates

Higher Specific Allowance in Thailand

The higher specific allowance this quarter was mainly due to operational merger issues in Thailand, which are expected to normalize in the next 2 quarters.

Operational Challenges in Thailand

Integration challenges in the Thai Citi portfolio led to a temporary increase in delinquencies, impacting credit costs.

Increased Credit Costs

Net credit cost rose to 36 basis points this quarter, with total credit cost at 34 basis points, partly due to prudent collateral markdowns on corporate NPLs in the U.S. and Hong Kong.

Company Guidance

During the UOB's Q3 2024 earnings call, the bank provided guidance on several key metrics. They forecast high single-digit loan growth and a double-digit increase in fees, particularly from cards, wealth, and trade-related activities. Total income is expected to rise, with a cost-to-income ratio projected between 41% to 42%. The bank also anticipates maintaining total credit costs within 25 to 30 basis points. With a strong capital position, as evidenced by a CET1 ratio of 15.5%, UOB is considering capital management strategies, including potential share buybacks or higher dividends, to optimize the use of their excess capital.

UOB Financial Statement Overview

Summary

UOB exhibits strong profitability and growth, with a notable revenue increase and solid net profit margin. The balance sheet is stable with low leverage. However, cash flow challenges are concerning, especially the significant decline in free cash flow, raising liquidity management issues.

Income Statement

Very Positive

UOB has demonstrated a strong revenue growth trend with a 9.77% increase from 2023 to 2024. Net profit margin is solid at 42.33% for 2024, and there is a consistent net income growth. However, EBIT and EBITDA margins are not available for 2024, which limits the assessment of operational efficiency. Overall, the income statement reflects robust profitability and growth.

Balance Sheet

Positive

The balance sheet shows a strong equity position with a stockholders' equity ratio of 9.25% in 2024, indicating a stable financial foundation. The debt-to-equity ratio is effectively zero due to the absence of total debt in 2024, minimizing financial risk. However, a decline in cash and short-term investments suggests a potential liquidity concern. Overall, the balance sheet is strong with low leverage but potential liquidity risks.

Cash Flow

Neutral

UOB experienced a significant decrease in free cash flow from positive in 2023 to a negative free cash flow of -15.72 billion in 2024. The operating cash flow to net income ratio is negative, indicating issues with cash generation relative to net income. The decline in free cash flow is concerning, reflecting potential challenges in cash management and liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
20.58B	14.28B	13.01B	16.54B	11.92B	13.07B
	Gross Profit
28.14B	14.28B	13.93B	16.54B	11.92B	13.07B
	EBIT
4.63B	7.95B	9.10B	-86.00M	-84.00M	-106.00M
	EBITDA
647.00M	0.00	7.48B	0.00	0.00	0.00
	Net Income Common Stockholders
5.70B	6.04B	5.71B	4.57B	4.08B	2.92B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
58.43B	76.01B	87.44B	-49.42B	-36.56B	-36.80B
	Total Assets
340.03B	537.66B	523.52B	504.26B	459.32B	431.81B
	Total Debt
26.66B	0.00	37.18B	68.16B	52.17B	48.15B
	Net Debt
-31.77B	-76.01B	-50.26B	-10.51B	-17.71B	-23.49B
	Total Liabilities
306.99B	487.71B	477.05B	463.43B	418.84B	393.06B
	Stockholders Equity
32.87B	49.73B	46.23B	40.59B	40.26B	38.52B
Cash Flow		Free Cash Flow
-3.32B	-15.72B	9.89B	5.36B	4.11B	5.44B
	Operating Cash Flow
-2.44B	-14.85B	6.47B	6.06B	4.66B	6.00B
	Investing Cash Flow
-22.87B	-771.00M	-645.00M	-17.08B	-36.95B	-11.31B
	Financing Cash Flow
10.63B	1.13B	-7.69B	34.30B	32.63B	16.61B

UOB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UOVEF		$45.67B	10.56	13.43%	4.79%	―	―
Sector *	64 Neutral	$12.87B	9.81	7.76%	16985.65%	12.28%	-7.83%
CDEVF		$3.70B	25.57	2.21%	1.48%	―	―
DBSDF		$99.47B	12.05	17.99%	4.68%	―	―
OVCHF		$56.83B	10.11	13.78%	5.03%	―	―
SCRPF		$9.47B	12.93	20.60%	3.12%	―	―
WLMIF		$14.74B	12.59	5.84%	5.08%	―	―

* Financial Sector Average

Performance Comparison

UOVEF

UOB

28.11

6.87

32.34%

CDEVF

City Developments

4.07

0.07

1.75%

DBSDF

DBS Group Holdings

35.53

10.40

41.38%

OVCHF

Oversea-Chinese Banking

12.65

2.82

28.69%

SCRPF

Sembcorp Industries

5.54

2.00

56.50%

WLMIF

Wilmar International

2.36

0.18

8.26%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.